NATIONAL INTELLIGENCE BULLETIN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00975A029200010032-2
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 18
• Document Creation Date: December 20, 2016
• Document Release Date: August 4, 2005
• Sequence Number: 32
• Publication Date: August 19, 1976
• Content Type: REPORT

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NATIONAL INTELLIGENCE DAILY CABLE
Thursday August 19, 1976 CI NIDC 76-195C
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 Approved
National Intelligence Daily Cable for Thursday, August 19, 1976
The NID Cable is for the purpose ot intorming
senior officials.
CONTENTS
KOREA: DMZ Incident
LEBANON: Situation Report
USSR: East European Indebtedness
USSR-GREECE-TURKEY: Soviet Commentary
Protection of Citizens' Rights
THAILAND: Praphat Determined to Stay
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I North Korea almost certainly intended to inflict
casualties on US personnel in the incident at Panmunjom yes-
terday.
I I The Bureau of Intelligence and Research of the Depart-
ment o state does not feel current information is sufficient
to be certain whether the incident--or the taking of American
lives--was planned from Pyongyang or instead was the result of
local North Korean action.
According to numerous eyewitness accounts and photo-
graphs taken from a nearby observation post, the North Korean
guards clearly used excessive force resulting in the deaths of
the two US officers. A North Korean officer was heard telling
his troops to "kill" the UN (i.e., US) personnel.
North Korean personnel in the Joint Security Area
have engaged in minor harassment of US personnel since early
June. A North Korean radio broadcast termed yesterday's inci-
dent a US provocation and warned that any future incidents
would be met forcefully.
The violence seems intended to accomplish two objec-
--To underscore North Korea's general diplomatic case that
the US is the major source of tensions in Korea (an argu-
ment being made now at the nonaligned meeting in Colombo
and one that will be made later at the UN this fall).
--To arouse US public opinion about the US troop presence
in Korea in the midst of the election campaign.
I Since early this spring, North Korean propaganda has
charged almost daily that the US is introducing new weapons
into the South, conducting provocative military exercises, and
keeping South Korean armed forces on a war footing. Pyongyang
has warned that these developments have created a "grave sit-
uation" in which war may break out at any time.
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On August 5--only a few hours after an exchange of
fire between South and North Korean troops on the Demilitarized
Zone--North Korea, in an unusually high-level statement, al-
leged that the US and South Korea have now "completed" war
preparations. This was the first such high-level statement
since 1969 directed specifically at US actions in the South.
North Korea currently is working hard to get a harsh
anti-US statement at the nonaligned summit conference, now
drawing to a close in Colombo. The effort in Colombo is intended
to enhance prospects for North Korea's position in the UN Gen-
eral Assembly debate on the Korean issue this fall. A resolu-
tion has already been introduced which once again calls for US
withdrawal from Korea.
Despite some gains in international forums, the North
Koreans still hope to stimulate opposition in the US to a con-
tinued US troop presence.
The reaction in the US will undoubtedly have an im-
portant impact on North Korea's next move. Should Pyongyang
perceive the beginning of a divisive domestic debate over the
advisability of maintaining US troops in Korea, further con-
trolled acts of violence can be expected.
President Kim Il-song almost certainly does not in-
tend to resume the confrontation policy of the late 1960s, in
which the North Koreans staged hundreds of armed violations of
the. Demilitarized Zone. Nor is he likely to undertake high-risk
military provocations, either in the DMZ or against the South
Korean garrisons on islands in the Yellow Sea, that might re-
sult in serious clashes with South Korean forces.
The North Koreans respect the South's military capa-
bilities; blatant North Korean military provocations, moreover,
would undercut Pyongyang's political strategy of portraying the
US and the South as the aggressors. This strategy is intended
to discredit the Pak regime and to build international pressure
for a withdrawal of US forces.
Kim has acknowledged publicly that the time is not
ripe-for major military action and that he is relying on trends
in international opinion and on developments in South Korea to
create opportunities for advancing his goal of reunification on
North Korean terms.
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Iim said North Korea "in the future" planned to "stir
up wor d opinion more vigorously" by "publicizing" US "criminal
barbarities" and South Korean political repression. Kim candidly
declared that his objective was to "make the Korean question
the focal point of attention both in Asian and in world affairs."
There is no evidence of any unusual North Korean mil-
itary activity or deployments. North Korean military forces,
however, are normally in a position to launch a major assault
across the Demilitarized Zone with little or no warning. In
the light of the formidable capabilities of the US and South
Korean forces, the North Koreans would almost certainly hope
to capitalize on the element of surprise if they were to risk
major hostilities. The staging of the incident yesterday sug-
gests that Pyongyang entertains no such intent at present.
The North Koreans have agreed to attend a meeting of
the Military Armistice Commission early :his morning Washington
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LEBANON: Situation Report
I The Christians are continuing to shell areas in the
mountains east of Beirut, apparently as a prelude to a full-
scale assault.
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An escaped Palestinian commander of Tall
Zatar announce at a press conference that the Palestinians
lost about 3,000 dead and 6,000 wounded at the camp, with some
900 civilians still missing.
Following a night of unusually heavy and indiscrimi-
nate artillery fire in Beirut, leaders of the Phalanges Party
and the Palestinians have announced an agreement to stop shell-
ing residential areas inside the city. Neither Christian ex-
tremist Camille Shamun nor leftist extremist Kamal Jumblatt
were involved in the accord, however, and they are unlikely to
abide by it.
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I I In north Lebanon, the Christians have made no signif-
icant gains in their attacks on small villages on the outskirts
of Tripoli. In the south, the Palestinians are complaining of
Syrian artillery bombardments on their positions near Jazzin.
Saudi Arabia and Kuwait have been trying in the past
tew days to muster support for an Arab summit conference under
the auspices of the Arab League to make another try at dealing
with the Lebanese morass. Egyptian President Sadat, who is en
route to Saudi Arabia for a brief visit, yesterday agreed to
the scheme--possibly to placate his Saudi hosts, who have been
annoyed at Egypt's anti-Syrian activities in Lebanon.
Sadat's agreement to attend a summit, combined with
Saudi and Kuwaiti pressure, will make it harder for President
Asad to resist acquiescing to such a meeting.
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USSR: East European Indebtedness
//The Soviet and East European hard-currency debt
increase trom $13 billion at the end of 1973 to $29 billion at
the end of 1975 and will probably reach $40 billion by the end
of this year. The Western economic recession and inflation were
the main causes, but massive grain imports also added to the
USSR's hard-currency deficit and increased its borrowing needs.//
//The USSR's hard-currency trade deficit reached
a record $6.3 billion last year and a similar deficit is likely
in 1976. Industrial imports, especially of machinery and steel,
are rising; grain imports during this calendar year will con-
tinue near record levels. There are no indications that Moscow
intends to cut nongrain imports sharply--the only step that
could substantially reduce this year's trade deficit.//
//Eastern Europe incurred a record $6.5-billion
trade deficit in 1975, of which Poland accounted for about $3
billion. The other East European countries recorded much smaller
deficits; only East Germany's exceeded $1 billion.//
//The East European deficit will probably fall
moderately this year, reflecting some increase in exports and
a slowdown in import growth. Hungary's imports will actually
decline. In marked contrast to the rest of Eastern Europe,
Poland will match or exceed its 1975 deficit of $3 billion.//
//Moscow had no great difficulty financing its
1975 deficit. Medium- and long-term credits covered about half;
most were guaranteed by governments, but Eurodollar borrowings
rose to a record level as well. In addition, the USSR had to
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rely heavily on short-term financing to cover its unexpected
hard-currency shortfalls. By the end of 1975, Moscow's medium-
and long-term hard currency debt had risen to $7.5 billion and
its total debt to $10 billion.//
//The East Europeans also were forced to draw
heavily on the Eurocurrency markets, and their net liabilities
on these markets rose to $8.5 billion. Poland's total debt rose
to $6.9 billion, and East Germany and Romania had debts of
$3.8 billion and $3.0 billion, respectively.//
//The prospective hard-currency deficits for 1976
are likely to raise the Soviet debt to between $13 and $15 bil-
lion and Eastern Europe's to as much as $24 billion. Although
no Soviet or East European borrower has been turned down, the
cost of Western credit and the difficulty in obtaining it have
been increasing. The international banking community is becoming
concerned about the debt problem and the persistence of hard-
currency deficits.//
//Most Western governments are continuing to guar-
antee long-term credits but are examining them more closely
than in the past. West European governments believe they have
a political stake in expanded trade with the East and are will-
ing to provide large credits to sustain its growth. If Soviet
and East European hard-currency deficits continue for long at
high levels, these countries will have increasing difficulty
in obtaining new credits.//
//The USSR is still viewed as a good credit risk
while Poland's credit status is the poorest.//
//The seriousness of the Soviet and East European
debt problem depends greatly on whether and how quickly the
hard-currency deficits decline. On the whole, prospects are
good for substantial improvement in these countries' hard-cur-
rency trade balance during the next two years or so.//
//Soviet and East European exports during 1977 to
1978 will benefit from what should be a period of rapid eco-
nomic recovery and expansion in the West. Even if Western eco-
nomic expansion falters in early 1978, East-West trade would
continue to grow for the balance of the year, reflecting the
sizable lag between changes in Western economic activity and
their impact on trade flows.//
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//Higher export earnings should allow the USSR to
meet its debt obligations, reduce its current-account deficit
to manageable levels, and, given good harvests, still increase
nongrain imports at a respectable rate.//
//In some countries, export earnings may prove in-
sufficient both to reduce trade deficits and to meet increasing
debt service obligations and import needs. Poland's problems
are particularly serious. It will likely have difficulty raising
the substantial amounts of credit it will need to finance po-
litically necessary import growth.//
//The debt problem will be one of the many factors
tending to slow economic growth in the USSR and Eastern Europe.
In the USSR, a slowdown in the growth of hard-currency imports
for two or three years may hamper achievement of plans for pro-
duction and productivity in some industries, but it is not
likely to affect overall economic growth appreciably. In Eastern
Europe, the improvement in living conditions will slow markedly.//
//Debt problems are bound to complicate relations
between the East European countries and the USSR. All react to
hard-currency shortages by diverting to the West as many readily
salable goods as possible--mainly agricultural products, raw
materials, and the relatively small amounts of quality manufac-
tures. For the most part, Eastern Europe is not in a position
to divert such goods from the USSR; indeed, Moscow is insisting
on a better deal.//
//The USSR could solve some of its problems at
Eastern Europe's expense. For example, it could free crude oil
and other materials for hard-currency export and reduce grain
import requirements by cutting exports of these goods to Eastern
Europe and/or demanding higher prices for those goods it con-
tinues to export.
USSR-GREECE-TURKEY: Soviet Commentary
I I The USSR has been careful to avoid offending either
Greece or Turkey in its treatment of the Aegean dispute.
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Soviet media are reporting the statements and actions
0 of sides in a straightforward but abbreviated manner. Com-
mentators in the USSR have not discussed the technicalities of
the dispute, probably in. part because of current law-of-the-sea
negotiations.
I IThe Soviets have noted, but not emphasized, the po-
tential or hostilities in the present dispute. Last week Mos-
cow made representations in both Athens and Ankara noting that
as a coastal state the USSR has an interest in seeing that sea
communications are not disturbed because of the dispute. The
Soviets have sought also to protect their naval interests by
voicing opposition to suggestions that Greece might extend its
territorial waters limit..
I I The Soviets have supported calls for a negotiated set-
emen it have sidestepped the question of the proper forum.
They argue that the Helsinki agreement, signed by both Greece and
Turkey, provides a basis for a peaceful solution to the dispute.
I I The Soviets have also used the occasion to denigrate
NATO and to argue that both Greece and Turkey are ill-served
by the organization.
USSR: Protection of Citizens' Rights
A new Soviet statute that defines, for the first time,
the rights of citizens of the USSR accused of crimes will go
into effect January 1. This is the first significant revision
of the Code of Criminal Procedure since it became law in 1961.
We do not know how seriously the authorities will ob-
serve these newly defined rights, but the statute appears to be
a move in the direction of controlling arbitrary actions by of-
ficials. The law may be a reaction to the harsh criticism of
the Soviet record on individual rights and freedoms that was
leveled by West Europeans at the European communist party con-
ference in late June.
I I Under terms of the new legislation, authorities must
submit a written statement of the circumstances of an arrest to
the public prosecutor within 24 hours. The prosecutor must with-
in 48 hours approve further detention or order the release of
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the suspect. The apprehended person, if not released, has the
right to retain personal documents and notes related to the case
and to meet privately with his defense attorney.
I IThe announcement of the statute has been accompanied
by some rare Soviet media discussion of individual rights. An
Izvestia article that appeared on July 13, the same day the USSR
Supreme Soviet approved the statute, highlighted the importance
of legal protection for individual rights and cited General Sec-
retary Brezhnev's reference to that in his speech at the Soviet
party congress earlier this year. A signed article in Izvestia
on August 11 criticized officials who violate the letter and
spirit of the law by interpreting it arbitrarily or demanding
more than the law requires.
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THAILAND: Praphat Determined to Stay
Former military ruler Praphat reportedly told govern-
ment representatives yesterday that he was determined to stay
in Thailand and to fight any legal charges against him in court.
According to an official government statement, Praphat will be
placed in the custody of the army.
Praphat's return to Thailand could easily precipitate
a crisis situation for the 4-month-old government of Seni Pra-
mot. Seni is already on a potential collision course with a
newly aroused student movement. Student leaders are planning to
hold a large rally today to learn what steps the government has
taken in meeting their demands for the arrest of Praphat and
those who abetted his return. Praphat's determination to stay
will probably prompt student leaders to begin mobilizing their
forces for large-scale demonstrations.
The army seems to be in no hurry to help the govern-
ment. The army's willingness to act as custodian for Praphat
merely prolongs a situation that can only redound to the govern-
ment's disadvantage.
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